What Bank of America credit cards are and who issues them
Bank of America issues credit cards through its own bank, not through a partner company. When you open a Bank of America card, you are borrowing directly from Bank of America, N.A., which is a subsidiary of Bank of America Corporation. The bank sets the interest rate, fees, and rewards on each card it offers.
Bank of America offers cards in several categories: cash back cards that return a percentage of what you spend, travel cards that earn points toward flights and hotels, and cards with no annual fee for basic use. Each card has different rules about interest rates, spending limits, and what triggers a fee.
The bank also offers secured cards — cards backed by a cash deposit you make upfront — for people rebuilding credit or with no credit history. A secured card works the same way as a regular card, except your deposit acts as collateral if you stop paying.
Key Takeaways
- Bank of America sets its own interest rates and fees for each card, and rates vary based on your credit score and payment history.
- Most Bank of America cards charge an annual fee ranging from $0 to $95, depending on the card's rewards and features.
- You can check your interest rate and credit limit before you formally open an account by using the bank's pre-qualification tool on its website.
- If you miss a payment, Bank of America reports it to credit bureaus after 30 days, which will lower your credit score.
- Secured cards require a cash deposit but work the same way as regular cards and can help you build credit if you pay on time.
How interest rates and fees work on Bank of America cards
Your interest rate — called the Annual Percentage Rate or APR — depends on your credit score, income, and payment history. Bank of America does not publish the exact formula it uses, but cards with higher rewards typically carry higher APRs. A card offering 3% cash back may have an APR of 18% to 24%, while a no-reward card may be 16% to 20%.
The APR only applies if you carry a balance from one month to the next. If you pay your full statement balance by the due date, you pay no interest, even on a card with a 24% APR. This is called the grace period, and it applies to purchases on almost all Bank of America cards.
Annual fees range from $0 to $95 depending on the card. A card with no annual fee and no rewards is the cheapest to hold. A card with $95 annual fee typically offers higher cash back rates or travel perks that offset the cost if you use the card regularly. Bank of America also charges late fees (usually $25 to $35 for the first late payment, up to $39 for repeat offenses) and foreign transaction fees (typically 3% if you use the card outside the United States).
What happens when you open a Bank of America card
When you open an account, Bank of America pulls your credit report from one or more of the three major credit bureaus: Equifax, Experian, or TransUnion. This pull is called a hard inquiry and temporarily lowers your credit score by a few points. The impact fades within a few months.
The bank then decides whether to approve you and at what credit limit. Your credit limit is the maximum amount you can charge to the card. Bank of America may start you at $500 to $2,500 depending on your credit score and income. You can request a higher limit after you have used the card responsibly for several months.
Once approved, you receive a physical card in the mail within 7 to 10 business days. You can also use the card number when ready through the Bank of America app or website if you need to make a purchase before the physical card arrives.
How to use your card without paying interest
The simplest way to avoid interest is to pay your full statement balance by the due date each month. Your statement balance is the total of all charges you made during the billing cycle, which typically runs 28 to 31 days. Bank of America sends you a statement (by mail or email, depending on your preference) showing the balance due and the due date.
You can pay through the Bank of America website, mobile app, or by phone. Payments made online or through the app usually post within one business day. If you pay by phone or mail, allow extra time — mail payments can take 5 to 7 business days to reach the bank, and phone payments may take up to 3 business days.
If you cannot pay the full balance, pay at least the minimum payment by the due date to avoid a late fee and credit damage. The minimum is usually 1% to 3% of your balance. Paying only the minimum means the rest of your balance carries forward to the next month and accrues interest at your APR.
What to do if you miss a payment or carry a balance
If you miss the due date, Bank of America charges a late fee when ready. More importantly, a late payment stays on your credit report for seven years and damages your credit score. The damage is worst in the first few months after the late payment, then gradually fades.
If you are 30 days late, Bank of America reports the account to the credit bureaus. If you are 60 days late, your interest rate may increase to a penalty APR, which can be as high as 29.99% depending on your card. If you are 180 days late (about six months), the bank may close your account and send the debt to a collection agency.
If you carry a balance intentionally — meaning you do not pay the full statement balance — interest accrues daily on the unpaid portion. Bank of America calculates interest using the average daily balance method, which means it adds up your balance each day of the billing cycle, divides by the number of days, and applies your APR to that average. This method is standard across the industry.
How Bank of America cards affect your credit score
Opening a Bank of America card affects your credit score in two ways. First, the hard inquiry lowers your score by a few points when ready. Second, the new account lowers your average account age, which also affects your score. Both effects are temporary and fade within months if you use the card responsibly.
Over time, a Bank of America card can help your credit score if you pay on time. Payment history is the largest factor in your credit score (35% of the total), so a card with a clean payment record builds credit faster than no card at all. Your credit utilization — the percentage of your credit limit that you are using — also matters (30% of your score). Using less than 10% of your limit is ideal; using more than 30% can lower your score even if you pay on time.
If you close a Bank of America card, the account stays on your credit report for 10 years. Closing a card also raises your credit utilization on your remaining cards (because your total available credit shrinks), which can temporarily lower your score. For this reason, it is usually better to keep old cards open and unused rather than close them.
Rewards, cash back, and travel benefits
Bank of America offers cash back on most of its cards, ranging from 1% to 3% depending on the card and the category of purchase. Some cards offer flat cash back (the same percentage on all purchases), while others offer bonus categories (higher cash back on groceries, gas, or dining, for example). A card offering 3% cash back on dining means you earn $3 for every $100 you spend at restaurants.
Travel cards earn points instead of cash back. Points can be redeemed for flights, hotels, or statement credits. The value of a point varies by card and redemption method, but typically ranges from 0.5 cents to 2 cents per point. A card earning 2 points per dollar spent on travel purchases is worth roughly 1% to 4% cash back depending on how you redeem the points.
Rewards are only valuable if you use them. A card with a $95 annual fee and 3% cash back is only worth it if you spend at least $3,200 per year on the card (to earn $96 in cash back and break even on the fee). If you spend less, a no-fee card with 1% cash back is a better choice.
Frequently Asked Questions
Can I get a Bank of America card if I have bad credit?
Bank of America offers secured cards for people with low credit scores or no credit history. A secured card requires a cash deposit (typically $500 to $2,500) that serves as your credit limit. You use it like a regular card, and on-time payments build your credit score. After 6 to 12 months of responsible use, you may be able to convert it to a regular card and get your deposit back.
What is the difference between a Bank of America card and a card from another bank?
The main difference is the issuer and the specific terms. Bank of America sets its own interest rates, fees, and rewards. Another bank's card may have a lower APR, higher cash back, or lower annual fee. The best card for you depends on how much you spend, what categories you spend in, and whether you carry a balance. Comparing cards side by side on the Bank of America website or on third-party comparison sites helps you find the best fit.
How do I know what interest rate I will get before I open an account?
Bank of America offers a pre-qualification tool on its website that shows you the range of APRs you may receive without doing a hard inquiry. The actual rate you receive may be lower or higher than the range shown, depending on your final credit report and income verification. The tool is free and does not affect your credit score.
What happens if I do not use my Bank of America card?
If you do not use your card for a long period (typically 12 months or more), Bank of America may close the account due to inactivity. A closed account stays on your credit report for 10 years and may lower your credit score slightly because your available credit decreases. To keep a card active, use it at least once every few months, even for a small purchase.
Can I transfer a balance from another card to a Bank of America card?
Yes. Some Bank of America cards offer a 0% introductory APR on balance transfers for a set period (typically 6 to 12 months). You pay a balance transfer fee (usually 3% to 5% of the amount transferred) upfront. A balance transfer can save you money on interest if you pay off the transferred balance before the introductory period ends, but it does not reduce the total amount you owe.